Beijing warns about
possible deflation

Comments highlight
dilemma of keeping
economy on track

HONG KONG -- Faced with an industrial glut of everything from steel to cement to cars, the Chinese economy is flirting with deflation, a government think tank warned.

Economists in China and overseas are divided over whether the threat of deflation is pressing, even though consumer price inflation is now crawling at a rate of only about 1%. Many economists forecast another year of robust expansion in 2006, after Beijing officially...